Word of Mouth Advertising: Is it Enough?

There’s a lot to be said regarding the power of word of mouth (WOM) advertising and how it can help a business grow. All a business owner needs to do is to deliver the best service and products so they will better their chances for repeat business. And with that, the customers they have today will go and tell their friends about their experience tomorrow. And those friends will tell their friends and so on and so on.   It may take days or months or even years to build their business this way.

Word of mouth is definitely a key factor for a business’s advertising strategy, but it is it enough to sustain their brand and expand their reach? That’s the dilemma. Of course, WOM doesn’t cost anything so it is very appealing to the bottom line! But in today’s competitive market, businesses need to incorporate a consistent approach using traditional and non-traditional advertising to keep their business on top of mind which goes along with their word of mouth reputation.

I remember a conversation I had many years ago with a very conservative business owner whose family owned company was a cornerstone of their community for many years. We talked for quite a while about his business, about the trends in the market and the challenges faced. At that time, he was hesitant to invest a lot of his hard earned money into advertising because everybody knew them and he had a long line of repeat customers.   I may have been bold in saying this but I said, ‘Can you stand on one foot?’ He looked at me and said, ‘Well, yes, of course I can!’ I then said, ‘OK, so…go ahead. Now, how long can you stand on one foot? And how far will you get?’ It was a funny moment when he chuckled and understood my meaning. His business could stand on one foot by just relying on WOM advertising, but he wouldn’t be able to sustain that for long or ever expect to grow his business in a way that would allow them to increase their market share.

I’m happy to say that this particular business owner did eventually begin to ramp up their advertising to reach new customers and enhance their relationship with their existing customers. They continued to deliver great service and products, they expanded their business and today the next generation is carrying on the tradition. Is your business ready to put both feet on the ground or are you still trying to hop on one foot?

Should we use Digital or Traditional Advertising? The answer is … yes, please!

If you are a business owner or marketing executive, I’m fairly certain that you have pondered this very question: ‘Should we use traditional media or digital media for our advertising strategy?’ It most definitely should not be a decision that is based on a coin toss or choosing one over the other. When a client asks me that question, my answer is always the same: Yes! And a resounding yes, at that.

Advertising options are expanding at a more rapid pace today than they did even five or ten years ago. It seems that we learn of new ways to reach and engage with potential customers on a daily basis. And although a business needs to stay on the cutting edge of technology in order to remain competitive, they should be careful not to lose sight of the traditional ways and means that should still be a part of their strategy in order to drive the recognition of their brand or services.

An effective and strategic advertising plan that includes a combination of traditional and digital media is more impactful and will deliver higher customer results. And this is why. According to Nielsen Media Research, 86 percent of smart phone owners say that they use their phone as a second screen while watching TV, and half do it every day. This is something that has been evolving dramatically over the past few years.

While it’s true that the advertising landscape changes like the wind, it still remains important for a business to continue to brand and advertise in targeted traditional media so that they remain on top of the consumers mind. If a consumer is unfamiliar with your brand, they may be less likely to recognize your business when they are online searching for services and products.

In the past five years, most traditional media companies have added digital based advertising elements such as SEO, SEM/PPC, behavioral remessaging campaigns, interactive or rich media ads or multi-screen platforms in order to remain competitive. And digital media companies continue to develop and fine-tune new ways to engage with consumers and track their behaviors through analytics.

Each side of the media coin, traditional and digital, offer advantages that can help your business sustain your brand and increase your sales. So the next time you are considering what direction to take your advertising strategy and this question comes to mind, I hope that your answer is also a resounding yes!

Marketing Budget Planning- to cut or not to cut?

For businesses working on a calendar fiscal year, the stress of the holiday season is nothing compared to the stress of planning budgets for the following year!   No department wants to suffer cuts and all business owners need to make some very difficult decisions every year to forecast what will make the next year more successful than the current year.

The challenge becomes ‘to cut or not to cut?’ and unfortunately, the first place that is affected is the last place that should be. Marketing and advertising budgets are generally a target when it comes to determining where expenses can be trimmed, since much of the ROI is based on intangibles like name recognition and branding.

One of my favorite quotes is, “The man who stops advertising to save money is like the man who stops the clock to save time.” It has been credited to a few wise men throughout history but the bottom line is that if a business expects to grow, the worst place to cut is the means in which you need to attract the new potential customers who are essential to that growth!

During the last recession, businesses that regained their financial position and market share the quickest were those who continued to market and advertise in spite of the unstable economic conditions. Granted, they needed to cut the fat out of their budgets and be more deliberate in their strategy, but they knew that in order to be present when the customers were ready to buy again, they needed to keep out there on top of their minds.

I had this discussion with a business owner once who every year planned their marketing budget to be slightly less or at par with the previous year’s sales. But yet, they projected to have a minimum increase of sales for their staff of 10-20%. My thoughts were, ‘how can you expect to get the attention of more people to come to your business while spending less?’ Why not use the philosophy of spending slightly more, but do it more strategically to gain more traffic and market share?   Sadly, determining the risk was too great, the budget continued to decrease and of course the sales didn’t increase.

Although it is tempting to save money in the short run, if your business is no longer on top of the consumer’s mind you are really eliminating any potential future business when they are ready to make a buying decision.   If you depend on driving more customers to buy your products or services, be prudent when determining what investment is needed to ensure you are able to reach them. Make sure your advertising and marketing strategies are working hard for your business and are efficiently budgeted to drive the most positive results.

Diversification: It applies to Advertising, too.

I was sitting with my financial planner one day and he was talking about market fluctuations, stability, risks, growth, equity, blah, blah, blah and then he said something about the importance of a portfolio having diversification.  It’s never safe to put all your money into any one fund, whether it’s a good fund or not.  You’ve heard the saying, ‘don’t put all your eggs in one basket’, right?  The risk is too great and the return on the investment would be slow, if any at all.  Distributing finances into multiple funds to ensure stability and balance and then tailoring the investments to my specific growth goals would pay off in the long run.   That made perfect sense to me as I’m sure it would to most people.

It dawned on me that the same principle applies to advertising strategies as it does in financial investment strategies.  Just like a financial plan that is diversified and invested wisely, an advertising plan is also more efficient, more effective and has a better chance of delivering successful results when it includes a diverse mix of media outlets targeting a specific outcome.

Often times, business owners and marketing executives try one media outlet at a time, putting all of their advertising dollars into that media with the thought that it is better to spend a lot in one place to increase their frequency.  And then they wonder why it didn’t work.  Frequency is good, but in order to be effective, you also need to reach the right amount of people.  When you put the entire advertising budget into any one media outlet, you sacrifice reaching more people.  You’re basically reaching the same people too often thus hitting a point of diminishing return. Think back to the ‘eggs in one basket’ analogy.  Too much in one basket is a recipe for disaster.

Diversification by definition means to invest in different types of something.  In the finance world, that could be stocks, bonds, growth funds or other managed funds.   For advertising, it could be print, TV, radio, billboards, digital or social advertising.   Of course, the variety of media that is brought into the advertising mix has to be well thought out and needs to be strategically aligned to reach the specific demographic audience needed to obtain a favorable return on investment.   Each media outlet has its strengths and weakness just like the many managed funds that are available to choose from when building your financial strategy.

What does your business’s advertising portfolio look like?  Is it diversified enough and in the right places to create efficiency and deliver a positive outcome to drive customer results?

Marketing vs Branding vs Advertising – What’s the difference?

The terms marketing, branding and advertising are often used interchangeably. However, branding and advertising are actually a part of the marketing process.   Maybe I’m a little hypersensitive having worked in the industry for almost twenty years. But I’ve worked hands on with marketing executives and business owners and sometimes even they can get confused.

This got me to thinking. What is the difference between Marketing and Branding and Advertising?

All three elements work together to increase sales and enhance your image. As a business owner or marketing executive, you know that there are many duties that fall under the marketing category. So, if marketing were an umbrella, then branding and advertising would fall underneath it.

Marketing not only encompasses branding and advertising. It covers strategy as well:

• Earned media, such as public relations, grass roots efforts, community involvement, etc.

• Owned media, including your website and social media efforts on Facebook, Twitter, Instagram or Pinterest

• Paid media, which covers traditional advertising like TV, radio, print and billboards as well as non-traditional paid advertising via digital online campaigns, cinema, et al.

Branding is more than just a logo or a color theme, although that is an integral part. It’s also the look, the feel, or a characteristic that serves to identify a business’s service or products.   It creates an association between the consumer and the business.   It also includes a vision and mission statement, taglines, strategy and trademarking.

Advertising is the means to the end. A successful marketing strategy includes advertising to help attract potential customers and establish brand loyalty. For example, advertising may enhance potential buyers’ awareness of the particular brand, while loyalty to a brand justifies the cost of advertising spent on it. Likewise, advertising and branding are single components of the marketing process, while all three components work as a cohesive unit toward increasing sales and enhance the company’s reputation.

Will the world end if someone says they want to buy marketing for their business when they really mean advertising? No! But I thought that maybe this insight might help clarify things for those who want to speak knowledgeably about their business and strategy the next time someone asks!